How much of tips earned as a waitress are you supposed to claim?

So you went to work and got two different pieces of advice. One was correct, report *all* of the tips. Continue to listen to that person. That's the law and keeps you out of trouble if there is an audit. It means your income is properly reported under the law and if you stay waitressing, gives you accurate earnings for credit and retirement purposes. The second one was incorrect. That person told you to lie and underreport your tips. Do NOT listen to that person. That person is willing to lie, cheat and steal because they think they deserve more money. The reason the check goes to zero is because with more income, you owe more tax. The tips went directly to his/her pocket, so they are no longer on the paycheck to pay the taxes. It doesn't mean he/she didn't get the money.

The controlling document from the IRS is Publication 531 - Reporting Tip Income. Click on the first link below to pull up an Adobe copy you can save or print out as needed. I'm also including a link to Pub. 1244 - which is the handy little book for notating your tips. The online version is okay, but you oughta' call 1-800-829-3676 and order a few paper copies. They're great and small enough to fit in a pocket. As far as taxability of your tips - the U.S. Tax Code essentially states that ALL income that is not specifically exempt from taxation is Taxable Income. So even a dollars worth of tips should be reported by you somewhere. G'Luck... Mike Womack, Sr. Partner Zero Degrees Tax LLP Moore, OK Lawton, OK

You are required to claim all. If the tips are only $1-$7 per hour, then your paycheck will not be next to nothing. If the tips are more than $7 per hour, then do not worry about your paycheck, just live off the tips.

You have one of two methods for paying withholding on tips. Most employers choose to calculate "imputed tips" - your gross sales times 8 to 10% to "impute" the amount of tips earned. They calculate your tips, add those to the rest of your wages to calculate taxes. They then deduct taxes, and back out the tips figure they used for tax calculations. That way taxes on tips come out of wages, everybody gets calculated the same way, and both you and your employer have no problems with IRS or state income tax authorities. Some places still go by the old method where you have to declare the exact amount of your tips, and the taxes on that are deducted from your wages. Your tips, if you are any good, should equal about 10% of your gross sales, since you generally have to split your tips with the busboy, busperson, or station cleaner, and possibly with the host, leaving you with about 10% on a standard 15% tip.

You are legally required to claim all of your tips Your paychecks will probably be very low, if your tips are good, since you already have the tip money from when you got it. That's probably most of what you make. Since the tax on ALL of your income, the base and your tips, will come out of your paycheck, and the tip income isn't there since you already got it, your paychecks will be low.

Legally you are required to report ALL of your tips. In practice, some people report less, but that is tax evasion or tax fraud. Under reporting by 90% is likely to create a red flag to IRS and that may trigger allocated tips by your employer or audit by IRS.

I'm also a waitres [at steak n shake] and i only claim 10% of my 'tippable sales' whatever it says on the computer, but tht doesnt include your credit card tips, those just automatically add on. & i get paid 4.17 + Tips .